Well, note that the lawsuit was based upon "consumer fraud...fraud," and other counts. Debts incurred by fraudulent means are specifically excepted from discharge in a bankruptcy. What this means is that, even if the hosts were to successfully emerge from bankruptcy, those underlying debts would still remain. What I am expecting the homeowners' counsel to do is file an adversary proceeding objecting to discharge before the bar date. While I cannot imagine this particular suit would proceed all the way to trial, the onus is on the homeowners to prove the fraud by a preponderance of the evidence, pleading specific facts in their complaint attesting to the alleged fraud so as to avoid dismissal.
Also of note is that their construction company was also named in the lawsuit, but has not as of yet filed bankruptcy itself. Presumably the homeowners would have recourse against the construction company.
It will be interesting to see how this shakes out. I imagine this matter will be settled out of court rather quickly, without the need for a lengthy trial. Stay tuned.